Morgan Stanley IQ is launching two structured products which are designed for volatile equity markets.
The FTSE Income plan delivers 7.5% for each year of its six years regardless of the direction of the FTSE 100 Index.
In addition to income payments, investors will receive the full return of their initial investment as long as the official closing level of the FTSE 100 level is not 50% or more below the initial level of the index on any day during the term of the investment. Otherwise, capital is at risk.
Meanwhile, the FTSE Bonus Growth plan offers potential returns of 57% (9.5% per year for six years) plus the return of their initial investment.
If the FTSE 100 level on each annual anniversary is the same as or higher than the start date level, then the Bonus Feature is activated and investors will receive a fixed return of 9.5% times the number of years the plan is live.
Once the Bonus Feature is activated, investors can choose to exit the plan early, receiving the fixed return plus their initial investment or receive them when the plan matures.
If the Bonus Feature is not activated during the investment term, then investors' initial investment will be protected as long as the final index level is more than 50% of the initial index level. Otherwise their capital will be reduced by 1% for every 1% that the index falls.
Marc Chamberlain, an executive director at Morgan Stanley IQ says: "Recent spikes in market uncertainty, particularly wider corporate bond spreads, created the right environment to secure some good potential returns whether investors are seeking growth or income strategies.
"The Bonus Growth Plan is ideal for investors who have a generally positive view on equity markets and who aren't sure when markets will improve, whilst the Income Plan would suit investors looking to generate an income which is, for example, better than cash on deposit."
The plans are open for investment until 7 July 2010, set at a minimum of £3,000. The plans are available as ISA, SIPP and SSAS, with commission at 3%.
Slendebroek CEO since 2014
For clients and social change
Our weekly heads-up for advisers
According to Cicero report
Adds 24 staff, three offices and £275m AUA